Stock Market

[S3th]

The UK has a completely separate fight than the US. For one, Eurozone inflation has remained sticky as both the BoE and ECB have been slow to move rates allowing a disparity between rates and inflation. With economies cranking along, a wage price spiral isn’t surprising. BoE’s rates aren’t high enough to incentivize savings and haven’t gotten to the point of tightening enough for unemployment to increase.

 

[Lightning8]

Post the article.

The United States is at the beginning of a slowdown as the economy continues to face significant upside inflation risks and tighter credit conditions, according to new minutes from the July Federal Open Market Committee (FOMC) policy meeting.

Although the economy has been expanding at a "moderate pace," the latest credit developments in the "sound and resilient" banking system were "likely to weigh on economic activity" for businesses and households.

Staff economists no longer see a "mild recession" later this year amid better-than-expected spending and real activity.

 

[Lightning8]

I am in the belief that inflation has been beaten. We will likely see a small tick up in Q3 then back on track. Rates higher for longer is going to surprise the market and that is when the marriage fails apart.

Do you go to the grocery store? Have you seen the prices of reloading components such as projectiles, powders, primers - the reloading components are becoming available thereby reducing supply-demand gouging but raw material, manufacturing, shipping cost increases still driving prices up. Rent skyrocketing - mortgage higher - $1000 car payments.

 

[Lightning8]

Bond yields continue to rise across the board, continuing an upswing that began nearly three months ago at the beginning of the summer. In fact, the yield on the benchmark 10-year Treasury (US10Y) closed at 4.25% on Wednesday - marking the highest level since 2008 - and extended gains overnight by climbing another 4 bps to 4.29%. The upward march follows the release of the latest FOMC minutes, which stressed that additional interest rate hikes might be needed.

The minutes: "With inflation still well above the Committee's longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy... Participants generally noted a high degree of uncertainty regarding the cumulative effects on the economy of past monetary policy tightening... and emphasized the importance of communicating as clearly as possible about the Committee's data-dependent approach to policy and its firm commitment to bring inflation down to its 2% objective."

Investors are sizing up the latest developments and how rising yields compare with stock valuations. While the equity market has had a few hiccups in August, stronger-than-expected economic data continues to pour in and dip buying continues to be a strategy for those that expect the Fed to end its hiking cycle soon. Others say 10-year yields above 4% still present a good buying opportunity, in contrast to the potential rewards from pricey stocks and multiples that might not be as appealing. Check out Treasury and TIPS yields, as well as bond ETFs, on the Seeking Alpha bonds page.

Analyst commentary: "This higher-for-longer narrative is coming out of the Fed, causing nominal rates and real rates to keep moving higher," declared Lawrence Gillum, chief fixed income strategist at LPL Financial. "Whether they can continue to keep moving higher is the question. Ten-year Treasury yields have a direct impact on mortgage rates, so if they go higher, we're likely to see continued stress in housing markets. The 10-year TIPS rate tends to impact investment alternatives so that investors might choose TIPS over riskier choices."

Wall Street Breakfast 8/17

 

[S3th]

Do you go to the grocery store? Have you seen the prices of reloading components such as projectiles, powders, primers - the reloading components are becoming available thereby reducing supply-demand gouging but raw material, manufacturing, shipping cost increases still driving prices up. Rent skyrocketing - mortgage higher - $1000 car payments.

I increased my grocery budget roughly 8 months ago and have not had to adjust it since.

Yes, the cost of financing is higher, therefore debt service payments increase.

 

[Hobo Hilton]

NEW YORK —
Michael Burry, the "Big Short" investor who became famous for correctly predicting the epic collapse of the housing market in 2008, has bet more than $1.6 billion on a Wall Street crash.

Burry is making his bearish bets against the S&P 500 and Nasdaq 100, according to Security Exchange Commission filings released Monday. Burry's fund, Scion Asset Management, bought $866 million in put options (that's the right to sell an asset at a particular price) against a fund that tracks the S&P 500 and $739 million in put options against a fund that tracks the Nasdaq 100.




Burry is using more than 90% of his portfolio to bet on a market downturn, according to the filings.

No Longer Available

www.kcra.com

 

[Hobo Hilton]

I am confident a portfolio mix of $TSLA, $ENPH, and $ALB will outperform the market 2x from today to 2027.

I also don't understand why you think share buybacks are a bad thing. It isn't propping up any share price.

Rather than buy back stock, here is a good example of what to do with that excess money.
_________
WASHINGTON — BAE Systems, a defense and security conglomerate based in the United Kingdom, announced Aug. 17 it intends to acquire Ball Aerospace for $5.5 billion.
Ball Aerospace, based in Westminster, Colorado, is a manufacturer of spacecraft, components and other systems for military, civil and commercial space applications.
The acquisition would give BAE Systems “strong growth potential in areas aligned with the U.S. intelligence community and Department of Defense’s highest priorities,” the company said in a statement.
With $26 billion in annual revenues, BAE Systems has a significant U.S. presence. The U.S. government is now its largest customer. BAE’s U.S. subsidiary, headquartered in Falls Church, Virginia, supports large DoD programs in air, land, sea and cyber warfare.

BAE Systems to acquire Ball Aerospace for $5.5 billion

BAE Systems to acquire Ball Aerospace for $5.5 billion

spacenews.com

 

[Hobo Hilton]

The UK has a completely separate fight than the US. For one, Eurozone inflation has remained sticky as both the BoE and ECB have been slow to move rates allowing a disparity between rates and inflation. With economies cranking along, a wage price spiral isn’t surprising. BoE’s rates aren’t high enough to incentivize savings and haven’t gotten to the point of tightening enough for unemployment to increase.

BOE rate is 5.25
FED is 5.5
EU is 4.25

All of them are well below the "real" inflation rate for their region.

Inflation will continue to get worse as the reporting agencies cook the books in a effort to mislead the people.
Leave Wall Street and DC for a moment, grocery shop after filling your gas tank and report how much more you spent than a year ago at this time.
Yesterday I fueled my truck on the way to Missoula.... Bought a piece of steel at Pacific Metal's for $1.36 / lb, Costco has eliminated the small packages of everything while the prices have increased (move less and charge more), Walmart summer and garden departments have only empty shelves... Seldom have I ever seen empty shelves at a Walmart. Make a mental note !

Maybe it's just "regional"... LOL

 

[Hobo Hilton]

I left Costco with very few item's and went down to Walmart and left with a basket full.
Always a reliable indicator.

Walmart raises full-year earnings forecast as grocery, online growth fuel higher sales

Walmart beat earnings and revenue expectations as it capitalizes on its low-priced reputation with consumers looking for value.

www.cnbc.com

 

[jrhtx]

Walmart summer and garden departments have only empty shelves... Seldom have I ever seen empty shelves at a Walmart. Make a mental note !

Maybe it's just "regional"... LOL

It's not regional but it is seasonal. I hit HD for some items yesterday. Garden center supplies like sprinklers, hose, summer bug products etc are almost gone. That has been typical for several years. They don't want the inventory and need shelf space for Halloween and Christmas products in a few weeks.

 

[S3th]

Rather than buy back stock, here is a good example of what to do with that excess money.
_________
WASHINGTON — BAE Systems, a defense and security conglomerate based in the United Kingdom, announced Aug. 17 it intends to acquire Ball Aerospace for $5.5 billion.
Ball Aerospace, based in Westminster, Colorado, is a manufacturer of spacecraft, components and other systems for military, civil and commercial space applications.
The acquisition would give BAE Systems “strong growth potential in areas aligned with the U.S. intelligence community and Department of Defense’s highest priorities,” the company said in a statement.
With $26 billion in annual revenues, BAE Systems has a significant U.S. presence. The U.S. government is now its largest customer. BAE’s U.S. subsidiary, headquartered in Falls Church, Virginia, supports large DoD programs in air, land, sea and cyber warfare.

BAE Systems to acquire Ball Aerospace for $5.5 billion

BAE Systems to acquire Ball Aerospace for $5.5 billion

spacenews.com

There are four things a corporation can do with excess cash:
1. Dividends
2. Share repurchases
3. CapEx
4. M&A

All should be considered for best bang for the buck. I’m sure you think NVDA is well overpriced but would complain if they diluted shareholders at their current valuation…

 

[Lightning8]

There are four things a corporation can do with excess cash:
1. Dividends
2. Share repurchases
3. CapEx
4. M&A

All should be considered for best bang for the buck. I’m sure you think NVDA is well overpriced but would complain if they diluted shareholders at their current valuation…

Note how few are choosing CAPEX - that tells you they are not looking to future opportunities and are being defensive

 

[S3th]

Note how few are choosing CAPEX - that tells you they are not looking to future opportunities and are being defensive

It depends on the business. M&A is expensive because of financing cost being near recent all time highs. No one is able to access the SOFR market in large long dated tranches so bonds are having to be issued which are a premium to todays treasury price. Tesla and Enphase are two that are supporting heavy CapEx. There is a significant variance in capex spend when you are a cash cow like Kontoor Brands and a growth story like Tesla.

 

[S3th]

 

[Lightning8]

30-year fixed-rate mortgages topped 7% this week, according to the Freddie Mac Primary Mortgage Survey, marking the highest level seen in more than 20 years. "The economy continues to do better than expected and the 10-year Treasury yield (US10Y) has moved up, causing mortgage rates to climb," said Sam Khater, chief economist at Freddie Mac. "Demand has been impacted by affordability headwinds, but low inventory remains the root cause of stalling home sales." Bankrate's Jeff Ostrowski also noted that home sales have fallen sharply since 2021, with many homeowners who have already locked into super-low mortgage rates deciding to stay put. (21 comments)

Wall Street Breakfast 8/18

 

[Lightning8]

Investors digested a slew of big-box retailer earnings this week, capped off by industry heavyweight Walmart (WMT). Despite a set of strong results, shares of the latter declined as U.S. comparable store sales growth slowed and management struck a cautious tone on consumer spending. On the other hand, Target (TGT) and Home Depot (HD) advanced following profit beats, but both retailers expressed caution about continued weakness in big-ticket items. “The warnings by corporate executives are well placed,” said Lawrence Werther, chief U.S. economist at Daiwa Capital, given pressures on shoppers' wallets including student loan payment resumption and tightening lending standards. The biggest stock jump this week was recorded at discount retail chain TJX (TJX), which witnessed increased customer traffic as shoppers hunt for better deals. (6 comments)

Wall Street Breakfast 8/18

Also articles about maxed out credit cards - when consumers finally hit the wall and slow down/stop spending, will that be the trigger for recession/depression/whatever.

 

[Bigfatcock]

Getting close to being able to pick up a very slightly used F-250 super duty for pennies on the dollar.

Can’t wait to pick up some Patek Phillipe watches for 50% off once all the social media influencers go broke.

Soon the OF models will have to transition to actual prostitution. I’m ready for that too.

 

[S3th]

 

[Hobo Hilton]

View attachment 8207573

Unfortunately, the mind set of the current administration is to pay workers more money for performing the same old job.
Inflation, higher wages, inflation, higher wages........ A vicious cycle.
Until the FED Reserve raises interest rates well above the level of inflation, the cycle will continue.

 

[Lightning8]

Stocks and bonds both fell for the week as healthy economic data drove the narrative that the Federal Reserve will keep interest rates higher for longer, though prices stabilized on Friday. After settling Thursday at its highest level since November 2007, the benchmark 10-year U.S. Treasury yield fell back below 4.3% but still logged its fifth straight week of gains. The steady rise in yields is making investors nervous because past surges have at times proved destabilizing for markets. With the 10-year yield still well below the level of short-term rates set by the Fed, some analysts see room for the benchmark rate to keep climbing. Among the major stock market indices this week, the S&P 500 posted a 2.1% decline to its lowest level in nearly eight weeks, the Dow Jones dropped 2.2% for its biggest weekly loss since March, and the Nasdaq Composite slid 2.6% to a 10-week low.

Wall Street Breakfast 8/19

 

[Hobo Hilton]

Stocks and bonds both fell for the week as healthy economic data drove the narrative that the Federal Reserve will keep interest rates higher for longer, though prices stabilized on Friday. After settling Thursday at its highest level since November 2007, the benchmark 10-year U.S. Treasury yield fell back below 4.3% but still logged its fifth straight week of gains. The steady rise in yields is making investors nervous because past surges have at times proved destabilizing for markets. With the 10-year yield still well below the level of short-term rates set by the Fed, some analysts see room for the benchmark rate to keep climbing. Among the major stock market indices this week, the S&P 500 posted a 2.1% decline to its lowest level in nearly eight weeks, the Dow Jones dropped 2.2% for its biggest weekly loss since March, and the Nasdaq Composite slid 2.6% to a 10-week low.

Wall Street Breakfast 8/19

When there is celebration of wages "outpacing" inflation.... It becomes a race to the end.
No one is going to like the end.
____________

Wages growth outpacing inflation, ONS figures show

Average weekly earnings are now rising faster than inflation for the first time since 2010, figures from the Office for National Statistics show.

www.bbc.com

 

[S3th]

 

[Hobo Hilton]

View attachment 8208192

The "Dow Jones" is simply Fantasy Football for the boy's on Wall Street. Rotate a loser out and replace with a high flyer of the current environment. What does a Dow 34,500 # mean to the guy standing next to you, in the check out line at the grocery store ? Ask him / her and get back to us with the answer. Were they wearing a genuine Rolex ? Were they driving a Tesla Model X Plaid ?

To the majority of Americans, all they have to do is look up while seated at their computer, "Real Estate" equates to the roof over their head. The home ownership rate in the U.S. was at 65.9% during the fourth quarter of 2022. But, in order to realize the gain on their home, they would have to sell it. Not many sellers at this time.

Gold, 12% of all Americans own gold, 14.7% own silver, and as predicted, middle-aged participants were more likely to own precious metals overall.

How many American's have $1,000 cash ? The numbers are consistently around 60%, meaning only 40% of Americans have enough savings to cover an unexpected expense without going into debt.

If a windfall showed up in my mail box, I'd buy grass seed and gold before a Rolex.

But you knew that.

 

[S3th]

Just had a call with my buddy who is a project manager of new construction. Company just went under with $85M of incomplete inventory.

 

[Hobo Hilton]

Just had a call with my buddy who is a project manager of new construction. Company just went under with $85M of incomplete inventory.

Shiiiiiit.............. I hate those calls.
Brace yourself, there will be more.
Watched the domino's start to fall mid year in 3 - 4 other recessions....
Seemed like there was always a tidal wave's of bankruptcies just before the first of the next year.
Start January 1 with a clean slate.

 

[Forgetful Coyote]

Burry's the one who predicted the '08 collapse...
Hes making a pretty serious bet against the stock market.

 

[Hobo Hilton]

The Australian company, since redomiciled to the US, aims to become one of the world’s lowest cost producers of lithium hydroxide, and says it is the most strategically located to serve the fast-growing North American electric vehicle supply chain, with operations already established in the US and Canada.

https://www.mining.com/momentum-builds-for-piedmont-lithiums-ambitious-production-plans-as-portfolio-expands-in-africa/

 

[Hobo Hilton]

"It;s just business"......... As the war lingers on and drains resources from supporters, someone has to start making money. Just how it is.
_____________

Citi buys $160 million of Russian aluminum others won’t touch​

Citi buys $160 million of Russian aluminum others won’t touch

The US bank was behind requests to deliver about 75,000 tons of aluminum out of warehouses in Gwangyang, South Korea.

www.mining.com

 

[Emerson0311]

"It;s just business"......... As the war lingers on and drains resources from supporters, someone has to start making money. Just how it is.
_____________

Citi buys $160 million of Russian aluminum others won’t touch​

Citi buys $160 million of Russian aluminum others won’t touch

The US bank was behind requests to deliver about 75,000 tons of aluminum out of warehouses in Gwangyang, South Korea.

www.mining.com

The silly woke crowd and socialist bureaucrats are being used by the super geeks to destroy everything the US thinks it stands for. The real big $$$$ knows the deal. Many of them go along because they are pedos that have needs, and/or are already compromised by their urges. The economic system needs to crash hard so the formerly confident beg for government intervention that will build back better according to the vision of Gates, Schwab, and Soros.
The rest of the world sees what is coming and their business decisions are beginning to reflect that. Chaos is cash for psychos though.

 

[Forgetful Coyote]

"It;s just business"......... As the war lingers on and drains resources from supporters, someone has to start making money. Just how it is.
_____________

Citi buys $160 million of Russian aluminum others won’t touch​

Citi buys $160 million of Russian aluminum others won’t touch

The US bank was behind requests to deliver about 75,000 tons of aluminum out of warehouses in Gwangyang, South Korea.

www.mining.com

Capitalism, desire for profit, and pure self interest ALWAYS win out over tard woke bullshit, every time..

 

[Graywolf.260]

“A separate analysis by FactSet found that ESG mentions in the transcripts of management calls with analysts declined in four of the past five quarters.

Now, some companies seem to be distancing themselves from their own initiatives, at least partly as a result of the backlash against ESG. That doesn’t mean they are backing away from spending on their environmental commitments. By a range of measures, the energy transition is accelerating, while more and more companies are signing on to emissions-reduction targets.

“These investments in energy transition are still happening; they’re just maybe not being labelled and marketed as energy-transition investments,” said Sarah Thompson, the managing director of sustainable finance at RBC Capital Markets.

“Those companies are not really changing their strategy, they’re just less vocal about it to attract less attention.”

Many investors are by now familiar with greenwashing, whereby companies exaggerate their own environmental credentials.

This newer phenomenon is known as “greenhushing,” and is essentially the opposite.”

https://www.mining.com/web/companies-keep-mum-on-esg-initiatives-as-greenhushing-takes-off/

Woke and anti woke have become two sides of the same dumb coin …

 

[S3th]

$LICY

 

[S3th]

Small caps like $LICY and $PLL are prime targets for M&A imo. I see very little risk at current levels.

 

[S3th]

I am completely out of NVDA (allocated to ENPH) and have some puts in play.

 

[Graywolf.260]

I am completely out of NVDA (allocated to ENPH) and have some puts in play.

ENPH has been tough. Puts on the general market, or on your ENPH position?

Consumer spending has been like Rasputin but the fed seems to really want to kill it. Credit is starting to crush people.

 

[E. Bryant]

ENPH has been tough. Puts on the general market, or on your ENPH position?

Consumer spending has been like Rasputin but the fed seems to really want to kill it. Credit is starting to crush people.

ENPH deserved to be a tough trade, but is getting closer to fair value - especially in comparison to the retardery in other tech stocks. My biggest concern is the it gets trampled in the run for the exit if/when the sector or overall market goes boom.

Sorry, but the Fed needs to kill credit and consumer spending. We've had one real tightening in the past 22 years and it shows.

 

[E. Bryant]

Note how few are choosing CAPEX - that tells you they are not looking to future opportunities and are being defensive

Yep - any time I see a "growth" company choosing not to invest in CapEx, I get very suspicious of the story.

 

[S3th]

ENPH has been tough. Puts on the general market, or on your ENPH position?

Consumer spending has been like Rasputin but the fed seems to really want to kill it. Credit is starting to crush people.

Enphase is suffering due to financing cost as that increases the break even analysis most firms use when selling. Enphase is still predominantly residential.

I have puts on $NVDA for September.

 

[S3th]

Enphase will raise like a phoenix and lead the next bull market.

 

[eca7891]

Enphase will raise like a phoenix and lead the next bull market.

Put your price target on it and a timeline.

 

[E. Bryant]

Enphase will raise like a phoenix and lead the next bull market.

 

[S3th]

Put your price target on it and a timeline.

End of 2025, $300+

 

[S3th]

 

[Hobo Hilton]

Enphase will raise like a phoenix and lead the next bull market.

Going to be a looong dry stretch in the market.
With inflation at 10% / year all of the bells and whistles will disappear.
In 3 years the world will look much different to ENPH

 

[S3th]

At this point my NVDA puts are going to expire worthless and my Tesla calls are going to execute. I guess this isn’t the worst environment to have more cash. Or maybe it is if equities keep rallying.

 

[Graywolf.260]

At this point my NVDA puts are going to expire worthless and my Tesla calls are going to execute. I guess this isn’t the worst environment to have more cash. Or maybe it is if equities keep rallying.

I think there is a classic bull trap in the making

 

[S3th]

I think there is a classic bull trap in the making

100% agree. I have these options for September as I expect the broader market to continue to sell off.

 

[Hobo Hilton]

At this point my NVDA puts are going to expire worthless and my Tesla calls are going to execute. I guess this isn’t the worst environment to have more cash. Or maybe it is if equities keep rallying.

You will need that cash when the bottom arrives in 4 years.
Patience Grasshopper.

 

[Hobo Hilton]

100% agree. I have these options for September as I expect the broader market to continue to sell off.

The only people making "sure money" will be the financial advisors, the bookies and the stock brokers... All make money regardless if the market moves up or down.
Then there is the tax man and the undertaker.
Snug up

 

[E. Bryant]

NVDA trading after-hours at 20x forward *sales* is pretty spicy.